Why would anyone think that if the government is giving out money that it would go anyplace other than to the best connected people and companies? From Bill Bonner at bonnerandpartners.com:
SAN MARTIN, ARGENTINA – As we pointed out last week, the C-virus seems to have set off the feds’ tendency towards jackassery.
That is, they always want to boss people around… to find an enemy… make war… spend money… rally gullible voters behind a Great National Cause…
…and rip off the public.
“We’re going to need really big thoughtful policies to put together to make it so that people are optimistic again,” White House economic adviser Kevin Hassett told reporters, warning that the U.S. jobless rate would likely hit 16% or higher this month.
“We hope to be talking to the president about it … to start to come up with the top five, six ideas that we want to take up with Congress,” he added.
Joe Biden in Politico:
The former vice president said that the next round of coronavirus stimulus needs to be “a hell of a lot bigger” than last month’s $2 trillion CARES Act, that it needs to include massive aid to states and cities to prevent them from “laying off a hell of a lot of teachers and cops and firefighters,” and that the administration is already “wasting a hell of a lot of money.”
“This is a war,” says U.S. Treasury Secretary Stephen Mnuchin, “and we need to win this war and we need to spend what it takes to win the war.”
Win the war?
The studies and statistics are coming in. They show that this “war” against the virus is another loser. Let’s break that down…
1) The virus arrived in the U.S. sooner than thought,
2) It is much more widespread than thought,
3) It doesn’t kill nearly as many people as thought,
4) The people who die are overwhelmingly old, fat, or sick,
5) Young people are more likely to kill themselves than die from the C-virus,
6) The ventilators that were so much in demand are either useless or actually harmful (88% of the people put on them in New York do not survive).
Last Thursday, for example, The New York Times reported that the rate of infection in the NYC metro area was 10 times higher than previously thought.
And then came TIME.com:
Almost Every Hospitalized Coronavirus Patient Has Another Underlying Health Issue, According to a Study of New York Patients
And yesterday in the Spanish-language publication Abordajes, mathematician Felipe Noguera put two and two together. The conclusion: The likely death rate is more like 0.1%… not the 6.9% widely estimated.
In other words… the C-virus is a nasty bug, with a particular grudge against people who are in bad shape.
Is that a good reason to lock down the whole economy and prevent young, healthy people from going about their lives?
But while the feds’ shutdown might be an honest mistake, their “bailout” is a crime. It is the grandest larceny in the history of the world…
Money for Friends, Clients, and Cronies
The feds are transferring trillions of dollars’ worth of wealth from the public to their friends, clients, and cronies.
A report at Bloomberg this morning tells us that little of the bailout money actually goes to the firms that need it:
U.S. Loans Didn’t Flow to Businesses Most at Risk, Study Shows
Instead, it’s going to the industries with the best lawyers and lobbyists. And when that runs out, there’s plenty more where that came from.
The shale oil industry, for example, was always a loser, supported largely by the Fed’s artificially low interest rates. Now, President Trump pledges the public’s money to bail it out:
I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!
He says he’ll send money to the farmers, too. Politico:
President Donald Trump on Friday [a week ago] announced a $19 billion economic rescue package for farmers and ranchers that will include sending out cash payments as well as buying farm products and redistributing them to food banks.
No Crony Left Behind
In short, the $2.2 trillion CARES Act has little to do with fighting a virus (not a single person will be saved as a result)… and a lot more to do with old-fashioned pork-barrel boondoggles.
One of our Dear Readers offered more insight about where the money is going…
Stimulus bill: $2,200,000,000,000.00
American population: 330,483,530
Dividing the cost by every person in America is approximately: $6,656.91/person.
The government could have given every person over $6,000, but instead will give $1,200 to each adult under a certain income. (Ok, not us, but…)
Wanna know where the missing 96% of your tax dollars went?
Bailouts: $300,000,000 for migrant and refugee assistance (pg. 147). $10,000 per person for student loan bailout. $100,000,000 to NASA, because, who knows why? Possibly $10,000,000,000 to the U.S. Postal Service, because why the heck not (Now you know how Amazon Prime offers free shipping)? $75,000,000 to the Endowment for the Arts, because why? $75,000,000 for the Endowment for the Humanities, because no one even knew that was a thing? $17,200,000,000 for the Veterans Health Administration. $30,000,000,000 for the Department of Education Stabilization Fund, because that will keep people employed?
$200,000,000 to Safe Schools Emergency Response to Violence Program. $300,000,000 to Public Broadcasting; NPR needs tax dollars now? $500,000,000 to museums and libraries; who the hell knows how we are going to use it? $338,000,000 to the Social Security Administration… but get this: Most of that money will go toward administrative costs, not helping people. $25,000,000 for cleaning supplies for the Capitol Building (I sh*t you not, it’s on page 136). $7,500,000 to the Smithsonian for additional salaries? $25,000,000 to the John F. Kennedy Center for Performing Arts? $25,000,000 for necessary expenses for the House of Representatives? (Seriously?) $2,150,000,000 upgrade to the IT department at the Department of Veteran Affairs. $324,000,000 for State Department Diplomatic Programs?
$363,000,000 for the Agency for International Development? $258,000,000 for International Disaster Assistance. $90,000,000 for the Peace Corp (pg. 148). $4,036,000 to Howard University – where and who went there? (pg. 121). This is a good one: $9,000,000 Misc. Senate Expenses (pg. 134). $100,000,000 to essential air carriers (pg. 162. This is of note because the airlines are going to need billions in loans to keep them afloat. $100,000,000 is chump change!)
Then there’s the additional funding through the “Take Responsibility for Workers and Families Act.” This sounds like it’s direct payments for workers (pg. 164). $10,000,000,000 towards airport programs, including funding for the Airlines Recycle and Save Program (pg. 163. Again, what’s this?) and the Federal Aviation Administration for administrative costs (pg. 165). $492,000,000 to National Railroad Passenger Corporation – Amtrak (pg. 167). $526,000,000 grants to Amtrak to remain available if needed through 2021 – what are the odds that doesn’t go unused? – (pg. 168). $25,000,000,000 for Transit Infrastructure (pg. 169). $3,000,000 Maritime Administration (pg. 172). $5,000,000 Salaries and Expensive Office of the Inspector General (pg. 172). $2,500,000 Public and Indian Housing (pg. 175). $5,000,000 Community Planning and Development (pg. 175). $2,500,000 Office of Housing. My favorite is public broadcasting. There’d be thousands more dead without that (sarcasm intended!)…
The big money, though, comes from the Fed… and it goes where it always goes – to Wall Street.
The Fed is funding Washington’s Swamp Filler program. And it’s pumping trillions of dollars into the financial system directly… intended to boost stock and bond prices.
Yes, Dear Reader, it’s capitalism on the way up… cronyism on the way down.